Texas Instruments Forecasts Miss Analysts’ Estimates

Texas Instruments Inc.'s chips go into everything from kidney-dialysis machines to DVD players, making its earnings an indicator of demand across the electronics industry. Photographer: Daniel Acker/Bloomberg

June 11 (Bloomberg) -- Texas Instruments Inc., the largest
maker of analog chips, predicted second-quarter profit and sales
that may fall short of analysts’ most bullish estimates as some
consumer-electronics makers hold off on component purchases.

Profit in the current period will be 39 cents to 43 cents a
share on revenue of $2.99 billion to $3.11 billion, the Dallas-based company said in a statement yesterday. On average,
analysts had estimated a profit of 41 cents and sales of $3.06
billion, according to data compiled b Bloomberg. The company
said in April profit would be 37 cents to 45 cents a share on
revenue of $2.93 billion to $3.17 billion.

While orders for chips used in industrial machinery and
cars have continued to grow, demand is weak for semiconductors
used in personal computers and consumer devices such as game
consoles, Vice President Ron Slaymaker said on a conference
call. Texas Instruments’ chips go into everything from kidney-dialysis machines to DVD players, making its earnings an
indicator of demand across the electronics industry.

“PCs will remain a trouble spot for the company,” said
Bill Kreher, an analyst at Edward Jones & Co. in Des Peres,
Missouri. “There may have been an expectation for a reset on
guidance and they just narrowed it.”

Texas Instruments shares slipped 3.7 percent to $35.26 at
the close in New York. The stock has gained 14 percent this
year, compared with a 21 percent gain in the Philadelphia
Semiconductor Index.

Under Chief Executive Officer Richard Templeton, Texas
Instruments is exiting the market for digital chips used in
smartphones and tablets. Cutting that division is causing total
sales to contract from a year earlier.

The company is focusing on the market for analog chips, the
semiconductors that convert what happens in the real world --
such as touch, sound and pressure -- into electronic signals.